Pension Reform: Issues and Hazards. Don’t Throw Out the Supplementary Schemes with the Bismarckian Bathwater

For a very long time now the future of pensions has posed a problem in France, mainly on account of the trend toward an imbalance between the number of workers contributing to the scheme and the number of inactive seniors. Many parametric reforms have already been adopted, though these have proved notoriously inadequate when it comes to providing sustainable remedies for pension funding problems. French President Emmanuel Macron has, therefore, declared his intention to carry out structural reform aimed at replacing the basic and supplementary schemes – there is a total of 42 of these – with a single points-based system in which the value of the points would be the main adjustment variable.

The High Commission for Pension Reform (HCRR) is tasked with implementing this reform which has been the object of fierce debate. That fact is attested here in the argument presented by Jean-Claude Angoulvant, who sees it as having two major shortcomings. The first is the desire to unify all schemes, overlooking the disparities between them and lumping together independent and categorial supplementary schemes, which he regards as being quite well managed. The second failing is the decision to have the system run by the state, which is a very poor long-term manager, rather than by the social partners and, in so doing, shifting the pension system from an insurance-based to a ‘Beveridgian’ logic. In keeping with our usual understanding of our Forum feature, this article expresses a viewpoint intended to stimulate our readers’ thinking on a reform project that is still under discussion.